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Inheritance Tax and the Family Home: Downsizing and Gifting Strategies

· 22 min

Executive Summary

The family home is the single most consequential asset in inheritance tax planning, yet the technical framework governing its treatment -- the residence nil-rate band, downsizing additions, gift with reservation of benefit rules, and pre-owned assets tax -- is materially more complex than mainstream coverage suggests. IHT receipts reached a record GBP 8.2 billion in 2024-25, with HMRC reportedly questioning 7,500 probate property valuations in the same period.12 With the nil-rate band and RNRB frozen through 2030-31, and pension death benefits entering the estate from April 2027 -- counting toward the GBP 2 million taper threshold -- more estates will lose RNRB entitlement through taper erosion.34 This article provides tax advisors with a forensic analysis of the five-step downsizing addition calculation, the GWROB and POAT anti-avoidance framework as applied to family home gifting, the viability of gift and leaseback arrangements, and the pension-taper collision that demands urgent client review.

1. The Family Home in the Inheritance Tax Landscape

The fiscal context for family home planning is defined by rising IHT receipts, frozen thresholds, and intensifying HMRC enforcement. IHT receipts reached GBP 8.2 billion in 2024-25, a 10.8% increase on the prior year and a new record.1 Provisional data for April 2025 to January 2026 shows GBP 7.1 billion collected in ten months, GBP 100 million ahead of the same period in 2024-25.1 The Office for Budget Responsibility forecasts receipts will reach GBP 14.5 billion by 2030-31.5

The nil-rate band has remained at GBP 325,000 since 2009-10; the residence nil-rate band at GBP 175,000 since 2020-21. Both freezes have been extended to 2030-31 via the Finance Bill 2025-26.3 Against this backdrop, the average UK property price reached GBP 270,000 in December 2025, with the England average at GBP 292,000.6 In London and the South East, average values substantially exceed the RNRB maximum, meaning the family home alone can consume the entire residence nil-rate band allowance and create taper exposure where total estate value approaches or exceeds GBP 2 million.

HMRC enforcement has sharpened materially. Freedom of Information data obtained by NFU Mutual indicates that HMRC launched 3,961 IHT investigations in the year to April 2025, up from 2,807 in the prior year -- a 41% increase.2 Trade press reports suggest approximately 7,500 probate cases were questioned for property valuations, with 1,500 families receiving additional IHT bills.2 Property valuations represent the primary area of HMRC challenge, reinforcing the importance of professional valuation and robust documentation in any family home planning strategy.

The combination of frozen thresholds, rising property values, and -- from April 2027 -- pension death benefits entering the IHT net creates a convergence that makes the family home the highest-priority planning asset for most estates above the nil-rate band. The technical provisions governing this asset -- RNRB eligibility, downsizing addition calculations, gift with reservation of benefit rules under FA 1986, and the pre-owned assets tax under FA 2004 -- demand forensic understanding from tax advisors. The Office of Tax Simplification found that the RNRB "attracted more comments than any other area of IHT," describing it as "too complex" for taxpayers and advisors alike.7

In 2022-23, 30,600 estates claimed RNRB, sheltering GBP 7.72 billion of chargeable estate value.8 The scale of RNRB utilisation underscores both its value as a relief and the consequences of losing entitlement through taper erosion or technical failure. For estates in the GBP 1.5 million to GBP 2.5 million range, every aspect of family home planning warrants review.

2. The Residence Nil-Rate Band Framework and the Taper Trap

2.1 Statutory Foundation and Qualifying Conditions

The RNRB was introduced by the Finance (No. 2) Act 2015, inserting sections 8D to 8M into IHTA 1984.9 The relief applies to deaths on or after 6 April 2017 and provides an additional nil-rate band where the estate includes a qualifying residential interest that is closely inherited by direct descendants.10

A qualifying residential interest is a dwelling house which was at some time the deceased's residence, or an interest in such a dwelling house.10 The property must be "closely inherited" -- that is, left to direct descendants, defined under IHTA 1984 s.8K as children, grandchildren, other lineal descendants, stepchildren, adopted children, foster children, guardianship children (under 18 at the time of the disposition), and spouses or civil partners of any such person.11 Practitioners advising blended families should note that stepchildren qualify as direct descendants at all subsequent times once the step-relationship is established. However, children of cohabitees are not direct descendants unless they independently satisfy one of the qualifying categories.11

The maximum RNRB is GBP 175,000 per person, yielding a combined married couple maximum of GBP 1,000,000 when both NRB and RNRB are fully utilised (2 x GBP 325,000 plus 2 x GBP 175,000).3 Transferable RNRB is claimed on form IHT436 by the personal representative of the surviving spouse or civil partner.12

2.2 The Taper Mechanism: 60% Effective Marginal Rate

The RNRB is subject to a taper where the value of the estate exceeds GBP 2 million. Under IHTA 1984 s.8D(5), the RNRB is reduced by GBP 1 for every GBP 2 of estate value above the threshold.13 For a single individual with maximum RNRB of GBP 175,000, the relief is fully extinguished at GBP 2.35 million. For a couple with full transferable RNRB of GBP 350,000, the relief is eliminated at GBP 2.7 million.13

The taper creates a 60% effective marginal rate within the taper band. Each additional GBP 2 of estate value above GBP 2 million incurs both the standard 40% IHT rate and the loss of GBP 1 of RNRB relief -- the latter representing an additional 20% effective charge. For a single individual, the taper band runs from GBP 2 million to GBP 2.35 million; for a couple, from GBP 2 million to GBP 2.7 million. This band is the highest-priority planning zone for any estate approaching the threshold.13

A critical technical point: the net estate for taper purposes includes assets qualifying for APR and BPR at their full value, and spousal exempt assets, but excludes the value of lifetime gifts that are no longer part of the estate at death.14 This means that BPR-qualifying business assets inflate the taper estate despite themselves being relieved from IHT -- a counterintuitive result that can eliminate RNRB in estates where the net chargeable value (after reliefs) is well below GBP 2 million.

From 6 April 2026, the APR and BPR framework changes materially. The 100% rate of relief is capped at the first GBP 2.5 million of combined agricultural and business property (GBP 5 million for spouses and civil partners), with relief at 50% for values above the cap -- producing an effective 20% IHT rate on the excess.15 Practitioners advising clients who hold agricultural or business property alongside a family home must model the interaction between these reformed relief rates and the RNRB taper calculation, because the full pre-relief value of APR/BPR assets continues to count toward the GBP 2 million taper threshold regardless of the relief rate applied.

3. The Downsizing Addition: Five-Step Calculation

3.1 Statutory Basis

The downsizing addition was introduced by Finance Act 2016 Schedule 15 paragraph 5, inserting IHTA 1984 ss.8FA to 8FE.16 The relief addresses the concern that individuals who downsize or sell their home might lose RNRB entitlement despite having owned a qualifying property. Two scenarios are covered: (a) the deceased downsized to a less valuable property, retaining a QRI in the estate (s.8FA); and (b) the deceased sold or gave away the property entirely, with no QRI remaining (s.8FB).16

The downsizing addition applies only where the disposal of the former qualifying residential interest occurred on or after 8 July 2015.17 Six conditions (A through F) must be satisfied under s.8FA, including that a qualifying former residential interest exists, that its value exceeded the current QRI value, that direct descendants inherit at least some of the non-QRI estate assets, and that a formal claim is submitted.16

3.2 The HMRC Five-Step Calculation

HMRC's Inheritance Tax Manual at IHTM46060 to IHTM46063 sets out the five-step methodology for calculating the downsizing addition.17

Step 1: Determine the available RNRB at the date of the property disposal. If the disposal occurred before 6 April 2017, the amount is GBP 100,000; otherwise, the applicable RNRB maximum for the tax year of disposal applies.17

Step 2: Calculate the value of the former home as a percentage of the Step 1 amount, capped at 100%.17

Step 3: Calculate the current QRI value (if any) as a percentage of the available RNRB at the date of death, capped at 100%. Where no QRI remains in the estate, this is 0%.17

Step 4: Subtract the Step 3 percentage from the Step 2 percentage. This is the "lost" percentage -- the proportion of RNRB entitlement that was forfeited through the disposal.17

Step 5: Multiply the RNRB available at death by the Step 4 percentage. The result is the downsizing addition.17

The downsizing addition is the lower of (a) the lost relievable amount from Step 5, and (b) the value of closely inherited remainder assets (non-QRI assets passing to direct descendants).17 The total RNRB, including any downsizing addition, cannot exceed the maximum available at the date of death.

3.3 Worked Example: Downsizing to a Smaller Property

Consider a couple where the husband owned a family home valued at GBP 600,000 in June 2021. They downsized to a flat worth GBP 250,000 in September 2021. The husband dies in July 2026, with total estate of GBP 1.8 million (including the GBP 250,000 flat). The flat and other assets pass to their children.

Step 1: RNRB available in 2021-22 (year of disposal): GBP 175,000.

Step 2: Former home value (GBP 600,000) as percentage of GBP 175,000 = 342%. Capped at 100%.

Step 3: Current QRI value (GBP 250,000) as percentage of RNRB at death (GBP 175,000) = 142%. Capped at 100%.

Step 4: 100% minus 100% = 0%. No downsizing addition is available.

This result illustrates a critical point: where both the former and current property values exceed the RNRB, no downsizing addition arises because no RNRB entitlement was lost. The downsizing addition is relevant only where the former home's value consumed more of the RNRB than the current QRI.

3.4 Worked Example: Complete Sale and No QRI

A widow sells her home (valued at GBP 200,000) in March 2020 and moves to rented accommodation. She dies in October 2026, with an estate of GBP 900,000 in cash and investments, all left to her grandchildren.

Step 1: RNRB available in 2019-20 (year of disposal): GBP 150,000.

Step 2: Former home value (GBP 200,000) as percentage of GBP 150,000 = 133%. Capped at 100%.

Step 3: No QRI in estate: 0%.

Step 4: 100% minus 0% = 100%.

Step 5: RNRB at death (GBP 175,000) multiplied by 100% = GBP 175,000.

The downsizing addition is the lower of GBP 175,000 and the value of closely inherited remainder assets. If the grandchildren inherit the full GBP 900,000, the addition is GBP 175,000. Combined with the standard NRB of GBP 325,000, the estate shelters GBP 500,000 from IHT. Without the downsizing addition, the estate would lose the full GBP 175,000 RNRB, costing GBP 70,000 in additional IHT at 40%.

3.5 Interaction with Taper and Practical Considerations

The downsizing addition is subject to the same taper reduction as the standard RNRB.18 Where the estate exceeds GBP 2 million, the total RNRB (including downsizing addition) is reduced by GBP 1 for every GBP 2 of excess. For estates marginally above the taper threshold, the downsizing addition may be partially or wholly eroded.

Where multiple disposals of qualifying residential interests occurred after 8 July 2015, the personal representative may select which single disposal to use for the downsizing addition calculation.17 The claim must be made on form IHT435, within 24 months of the end of the month in which the death occurred.12

4. Gifting the Family Home: The Anti-Avoidance Minefield

4.1 Gift with Reservation of Benefit: FA 1986 s.102

The most common family home planning error is the outright gift of the property to a child or other descendant while the donor continues to live there. FA 1986 s.102 provides that a gift is treated as a gift with reservation of benefit where the donee does not assume bona fide possession and enjoyment at or before the beginning of the relevant period, or the property is not enjoyed to the entire exclusion of the donor during the relevant period.19

The relevant period runs from the date of the gift (or seven years before death, whichever is later) until death.19 The critical consequence is that property subject to GWROB is treated as remaining in the donor's estate for IHT purposes at death, regardless of how many years have elapsed since the gift.20 The seven-year clock for potentially exempt transfers does not start running while a reservation of benefit subsists. A parent who gifts the family home to a child in 2016 but continues living there rent-free until death in 2026 has achieved nothing: the property remains in the estate in full.

4.2 Undivided Shares in Land: FA 1986 s.102B

From 9 March 1999, FA 1986 s.102B introduced specific GWROB provisions for gifts of undivided shares in land.21 Where a sole owner gifts a share (for example, 50%) of the property to another individual but continues to occupy, the gifted share is generally treated as a GWROB.21

However, s.102B(4) provides a narrow sharing exception. The statutory test requires that the donor receives no benefit (or only a negligible one) from the donee connected with the gift; HMRC's practical application expects both donor and donee to occupy the property as their home and each to bear a proportionate share of running costs.21 In practice, this requires the adult child to genuinely reside in the property as their home -- not merely to have a bedroom available. Both parties must pay their share of council tax, utilities, insurance, and maintenance costs, and the arrangement must be documented on arms-length terms.

HMRC will refer cases to its Technical Group where the donor retains an unequal (larger) share of occupancy relative to ownership, or where the running costs arrangement does not reflect genuine proportionate sharing.22 Practitioners should treat the s.102B(4) exception as narrowly construed and subject to significant HMRC scrutiny rather than a routine planning tool.

4.3 Pre-Owned Assets Tax: FA 2004 Schedule 15

Where a family home gifting arrangement escapes GWROB -- for example, because the donor genuinely moved out after the gift -- the pre-owned assets tax may still apply if the donor subsequently reoccupies or benefits from the property.23 POAT is an income tax charge on the "appropriate rental value" of land previously disposed of by the individual, where the disposal condition (IHTM44004) or the contribution condition (IHTM44005) is met.2425

The POAT charge is based on the market rent that would be payable in an arms-length transaction, less any payments the individual actually makes for their occupation.23 As an alternative, the individual may elect under IHTM44071 for the property to be treated as a GWROB, reverting to IHT estate inclusion and avoiding the annual POAT income tax charge.26 The election effectively allows the individual to choose between an annual income tax cost and an eventual IHT cost at death -- a decision that requires modelling based on life expectancy, property value, and marginal tax rates.

The interaction between GWROB and POAT creates overlapping traps. A gift that avoids GWROB may trigger POAT; electing out of POAT reinstates GWROB treatment. Tax advisors must map both regimes to each family home gifting scenario to ensure the intended IHT benefit is not negated by either anti-avoidance provision.

5. Gift and Leaseback: The Viable Alternative

5.1 Structure and Tax Treatment

The gift and leaseback arrangement represents the primary mechanism by which the family home can be removed from the estate while the donor continues to occupy it without triggering GWROB. The structure involves an outright gift of the property to the donee (typically an adult child), followed by the donee granting a lease back to the donor at full market rent.27

Where the gift is to an individual, it constitutes a potentially exempt transfer: exempt from IHT if the donor survives seven years.27 Where the gift is to a trust, it is immediately chargeable at 20% on value above the nil-rate band.27 The ongoing payment of full market rent satisfies the "full consideration" exception to GWROB under FA 1986 Sch.20 para.6(1)(a).19

CGT on the gift is typically eliminated by principal private residence relief under TCGA 1992 s.222, provided the property is the donor's main residence at the date of gift.28 PPR relief covers the dwelling house and garden or grounds up to the permitted area of 0.5 hectares (or larger where required for reasonable enjoyment of the property).28 Where the property has not been the sole or main residence throughout ownership, time-apportionment applies, with the final nine months always qualifying for relief.28

5.2 Ongoing Requirements and Cost-Benefit Analysis

The rent paid by the donor must be at full market value, professionally valued, documented on arms-length terms, and reviewed every two to three years.27 Failure to maintain market rent at any point -- even decades after the initial arrangement -- reactivates GWROB, bringing the property back into the estate.27 This is not a seven-year requirement; it is a lifetime obligation.

The income tax cost for the donee-landlord must be factored into the analysis. Rental income is taxable at the recipient's marginal rate, up to 45% for additional-rate taxpayers.27 The recipient may deduct allowable expenses (insurance, maintenance, letting agent fees) but the net income tax liability can be substantial. For a property with market rent of GBP 18,000 per annum and a donee paying tax at 40%, the annual income tax cost is approximately GBP 7,200 (before expenses). Over 15 years, this amounts to GBP 108,000 -- a figure that must be weighed against the projected IHT saving of 40% of the property value.

SDLT may arise on the grant of the lease, though the liability is typically modest relative to the overall IHT savings.27 The donor's ongoing rent payments also reduce their estate value over time, providing an additional IHT benefit beyond the removal of the capital value of the property.

Cash flow modelling is essential: the donor must be able to sustain rent payments for the remainder of their lifetime. Where affordability is uncertain, the arrangement may need to be scaled (for example, gifting a share of the property rather than the whole) or alternative strategies considered. The crossover point -- where cumulative income tax on rent exceeds the projected IHT saving -- depends on the property value, rental yield, donee's marginal tax rate, and the donor's life expectancy.

6. The April 2027 Pension-Taper Collision

From 6 April 2027, unused defined contribution pension funds and certain death benefits will be included in the estate for IHT purposes.4 The inclusion of pension values in the estate has a direct and quantifiable impact on RNRB entitlement, because pension values count toward the GBP 2 million taper threshold.4

Consider an estate comprising a family home valued at GBP 500,000, other assets of GBP 1.2 million, and a DC pension fund of GBP 400,000. Before April 2027, the estate value for taper purposes is GBP 1.7 million -- below the GBP 2 million threshold, preserving full RNRB. From April 2027, the estate value becomes GBP 2.1 million. The RNRB taper reduction is GBP 100,000 divided by 2, equalling GBP 50,000. The RNRB is reduced from GBP 175,000 to GBP 125,000, costing the estate GBP 20,000 in additional IHT at 40%.29

For larger pension pots, the impact is more severe. An estate of GBP 1.95 million with a GBP 500,000 DC pension becomes GBP 2.45 million post-April 2027. The taper reduction is GBP 450,000 divided by 2, equalling GBP 225,000 -- fully eliminating the GBP 175,000 RNRB. The additional IHT is GBP 70,000.29 HMRC estimates that 10,500 estates will become newly liable for IHT, and 38,500 estates will pay increased IHT as a result of pension inclusion.4

The planning response requires coordinated action across property, pension, and other estate assets. Staged pension drawdown can reduce the pension pot below the level that triggers taper erosion, though withdrawals are taxable as income at the individual's marginal rate. Downsizing the family home can release capital for lifetime gifting, reducing the taper estate while preserving RNRB through the downsizing addition. The combined strategy -- downsize, gift released capital as PETs, and draw down pension in a tax-efficient sequence -- may deliver the optimal outcome, though each element introduces its own tax and compliance considerations.

Tax advisors should note that the downsizing addition itself does not increase the taper estate; the addition is a relief mechanism, not an asset. However, the capital released through downsizing and retained in the estate will count toward the taper threshold unless it is gifted or spent. Modelling the interaction between property value, retained capital, pension value, and taper exposure is essential for estates in the GBP 1.5 million to GBP 2.5 million range.

The residence-based IHT regime enacted from 6 April 2025 adds a further dimension for international families.30 An individual who is a long-term UK resident -- having been UK tax resident for at least 10 of the previous 20 tax years -- is within the IHT scope on worldwide assets, including overseas pensions. Practitioners advising clients with cross-border pension arrangements must integrate residence status analysis with the pension-taper modelling described above.

Conclusion: A Decision Framework for Tax Advisors

The family home demands a structured advisory approach that integrates RNRB entitlement, downsizing mechanics, anti-avoidance compliance, and taper management. The following decision framework provides a systematic pathway for tax advisors.

First, determine whether the estate exceeds or is approaching the GBP 2 million taper threshold. If so, taper management is the primary objective -- every GBP 2 of estate reduction within the taper band saves GBP 1.20 in combined IHT and RNRB loss (the 60% effective marginal rate).13

Second, model the April 2027 pension inclusion. Estates currently below GBP 2 million that hold substantial DC pension funds may breach the taper threshold from April 2027. Forward projection is essential, not optional.

Third, assess whether gifting the family home is viable. Apply the GWROB checklist: will the donor vacate entirely? If not, does the s.102B(4) sharing exception apply? If continued occupation is required, is a gift and leaseback at full market rent affordable and sustainable? Map POAT exposure for any arrangement where GWROB does not apply but the donor subsequently benefits from the property.

Fourth, evaluate downsizing. Confirm the 8 July 2015 condition for the downsizing addition. Model the five-step calculation to quantify the recoverable RNRB. Ensure that direct descendants will inherit sufficient remainder assets to support the addition claim. Consider whether released capital should be gifted as PETs to manage taper exposure.

Fifth, where GWROB traps are unavoidable and downsizing is inappropriate, retention of the family home with alternative estate reduction strategies -- lifetime gifting of other assets, pension drawdown, charitable giving for the 36% rate -- may deliver the better overall outcome.

Throughout, professional property valuation is non-negotiable. Trade press reports indicate HMRC questioned approximately 7,500 probate property valuations in 2024-25, with 1,500 families receiving additional IHT assessments.2 Documentation of valuations, rent reviews, and running cost arrangements should be maintained contemporaneously. Cross-referral to solicitors for GWROB compliance, chartered surveyors for market valuations, and regulated financial advisors for pension drawdown strategy ensures comprehensive coverage across the advisory disciplines that family home planning demands.

CPD Declaration

Estimated Reading Time: 22 minutes Technical Level: Advanced Practice Areas: Inheritance Tax, Residential Property Tax, Estate Planning, Pension Tax

Learning Objectives

Upon completing this article, practitioners will be able to:

  1. Calculate the RNRB downsizing addition using the HMRC five-step methodology (IHTM46060-46063) for estates where the deceased disposed of a qualifying residential interest on or after 8 July 2015.
  2. Evaluate the gift with reservation of benefit (FA 1986 s.102/s.102B) and pre-owned assets tax (FA 2004 Sch.15) implications of family home gifting strategies, distinguishing between arrangements that succeed and those that are caught by anti-avoidance provisions.
  3. Apply the RNRB taper mechanism to estates approaching the GBP 2 million threshold, incorporating projected pension death benefit inclusion from April 2027 to quantify the impact on RNRB entitlement.
  4. Analyse the cost-benefit position of gift and leaseback arrangements, incorporating income tax on rental income, SDLT on lease grant, and ongoing compliance obligations to determine when the arrangement produces a net IHT benefit.

Competency Mapping

  • ICAEW Tax Faculty: IHT technical competence -- application of reliefs, anti-avoidance provisions, and cross-tax interactions
  • ATT: Personal tax and estate planning -- advanced application of IHTA 1984, FA 1986, and TCGA 1992 provisions
  • CIOT: IHT and trusts -- technical analysis of RNRB, GWROB, and POAT regimes

Reflective Questions

  1. How would the inclusion of pension death benefits from April 2027 affect current family home planning recommendations for clients with estates in the GBP 1.5 million to GBP 2.5 million range?
  2. What documentation and compliance protocols should be implemented to evidence market rent payments in gift and leaseback arrangements, given HMRC's increased scrutiny of property valuations?
  3. In what circumstances might retaining the family home until death deliver a better overall tax outcome than gifting or downsizing, and how should this analysis be presented to clients?

Professional Disclaimer

The information presented reflects the regulatory and legislative position as of 26 February 2026. Regulations, tax rules, and professional guidance are subject to change. Readers should independently verify all information before acting and seek advice from appropriately qualified solicitors, financial advisors, or other professionals for their specific circumstances.

Neither WUHLD nor the author accepts liability for any actions taken or decisions made based on the content of this article. Professional readers are reminded of their own regulatory obligations and duty of care to their clients.

Footnotes

Footnotes

  1. HMRC Tax Receipts and National Insurance Contributions Monthly Bulletin (February 2026). https://www.gov.uk/government/statistics/hmrc-tax-and-nics-receipts-for-the-uk/hmrc-tax-receipts-and-national-insurance-contributions-for-the-uk-new-monthly-bulletin ↩ ↩2 ↩3

  2. NFU Mutual Freedom of Information data, as reported by Saga Money (2025) and MoneyWeek. https://www.saga.co.uk/money-news/inheritance-tax-investigations ↩ ↩2 ↩3 ↩4

  3. GOV.UK: Inheritance Tax thresholds (updated October 2025). https://www.gov.uk/government/publications/inheritance-tax-thresholds/inheritance-tax-thresholds ↩ ↩2 ↩3

  4. GOV.UK: Inheritance Tax -- unused pension funds and death benefits (December 2025). https://www.gov.uk/government/publications/inheritance-tax-unused-pension-funds-and-death-benefits/inheritance-tax-unused-pension-funds-and-death-benefits ↩ ↩2 ↩3 ↩4

  5. GOV.UK: Budget 2025 document. https://www.gov.uk/government/publications/budget-2025-document/budget-2025-html ↩

  6. GOV.UK: UK House Price Index summary: December 2025. https://www.gov.uk/government/statistics/uk-house-price-index-for-december-2025/uk-house-price-index-summary-december-2025 ↩

  7. OTS Second Report on Inheritance Tax (July 2019). https://www.gov.uk/government/publications/office-of-tax-simplification-inheritance-tax-review ↩

  8. HMRC Inheritance Tax Liabilities Statistics: detailed data tables 2022-23. https://www.gov.uk/government/statistics/inheritance-tax-liabilities-statistics/inheritance-tax-liabilities-statistics-commentary ↩

  9. Finance (No. 2) Act 2015 s.9(4). https://www.legislation.gov.uk/ukpga/2015/33/part/2/crossheading/rate-bands ↩

  10. Inheritance Tax Act 1984 s.8E (Residence nil-rate amount). https://www.legislation.gov.uk/ukpga/1984/51/section/8E ↩ ↩2

  11. HMRC Inheritance Tax Manual IHTM46034: Direct descendants. https://www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm46034 ↩ ↩2

  12. GOV.UK: Claim the residence nil rate band (IHT435). https://www.gov.uk/guidance/claim-the-residence-nil-rate-band ↩ ↩2

  13. HMRC Inheritance Tax Manual IHTM46020: Calculating the RNRB: introduction. https://www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm46020 ↩ ↩2 ↩3 ↩4

  14. HMRC Inheritance Tax Manual IHTM46021: The taper threshold. https://www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm46021 ↩

  15. GOV.UK: Agricultural property relief and business property relief changes (December 2025). https://www.gov.uk/government/publications/changes-to-agricultural-property-relief-and-business-property-relief/agricultural-property-relief-and-business-property-relief-changes ↩

  16. Inheritance Tax Act 1984 s.8FA (Downsizing addition). https://www.legislation.gov.uk/ukpga/1984/51/section/8FA ↩ ↩2 ↩3

  17. GOV.UK: How downsizing, selling or gifting a home affects the residence nil rate band (IHTM46060-46067). https://www.gov.uk/guidance/how-downsizing-selling-or-gifting-a-home-affects-the-additional-inheritance-tax-threshold ↩ ↩2 ↩3 ↩4 ↩5 ↩6 ↩7 ↩8 ↩9

  18. HMRC Inheritance Tax Manual IHTM46067: Downsizing calculations: interaction with the taper threshold. https://www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm46067 ↩

  19. Finance Act 1986 s.102 (Gifts with reservation). https://www.legislation.gov.uk/ukpga/1986/41/section/102 ↩ ↩2 ↩3

  20. HMRC Inheritance Tax Manual IHTM14301: Gifts with reservation: requirements for a GWR. https://www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm14301 ↩

  21. Finance Act 1986 s.102B (Gifts with reservation: share of interest in land). https://www.legislation.gov.uk/ukpga/1986/41/section/102B ↩ ↩2 ↩3

  22. HMRC Inheritance Tax Manual IHTM14332: Gifts with reservation: possession and enjoyment by the donee. https://www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm14332 ↩

  23. HMRC Inheritance Tax Manual IHTM44001: Pre-owned assets: introduction. https://www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm44000 ↩ ↩2

  24. HMRC Inheritance Tax Manual IHTM44004: Pre-owned assets: the disposal condition -- land. https://www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm44004 ↩

  25. HMRC Inheritance Tax Manual IHTM44005: Pre-owned assets: the contribution condition -- land. https://www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm44005 ↩

  26. HMRC Inheritance Tax Manual IHTM44071: Pre-owned assets: election into Inheritance Tax. https://www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm44071 ↩

  27. Womble Bond Dickinson: Gift and leaseback arrangements: inheritance tax planning with the family home (2025). https://www.womblebonddickinson.com/uk/insights/articles-and-briefings/gift-and-leaseback-arrangements-inheritance-tax-planning-family ↩ ↩2 ↩3 ↩4 ↩5 ↩6 ↩7

  28. TCGA 1992 s.222 (Relief on disposal of private residence). https://www.legislation.gov.uk/ukpga/1992/12/section/222 ↩ ↩2 ↩3

  29. Royal London for Advisers: IHT: pension death benefits from April 2027. https://adviser.royallondon.com/technical-central/pensions/death-benefits/inheritance-tax-on-pension-death-benefits-from-april-2027/ ↩ ↩2

  30. HMRC Inheritance Tax Manual IHTM47020: Long-term UK residence test. https://www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm47020 ↩

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